https://www.reuters.com/business/openai-lays-groundwork-juggernaut-ipo-up-1-trillion-valuation-2025-10-29

✅ What the report says

According to Reuters:

• OpenAI is laying the groundwork for an initial public offering (IPO) that could value the company at up to $1 trillion. Reuters+2Crypto Briefing+2

• The company is targeting a filing with securities regulators perhaps as early as the second half of 2026, with a listing possibly in 2027. Investing.com+2Reuters+2

• The IPO might aim to raise at least $60 billion at the low end. Reuters+1

• While the IPO is under discussion, OpenAI emphasizes that its focus remains on building a “durable, mission-driven business” rather than simply going public for the sake of it. Reuters

🧮 Key context & background

To make sense of this, here are some important background facts:

• In early Oct 2025, OpenAI reportedly reached a valuation of about $500 billion following a major share sale of current/former employee stakes. Reuters+2Reuters+2

• OpenAI’s annualised revenue run-rate is reported to be around $10 billion (or more) by mid-2025, and some sources suggest a target of ~$20 billion by year-end. Reuters+2Reuters+2

• There has been a major restructuring of OpenAI’s corporate/governance setup: a nonprofit parent (the OpenAI Foundation) holds a stake, there is a for-profit arm, etc. This is relevant because public-market readiness often depends on clear governance and share structure. Investing.com+2Reuters+2

🎯 Why it matters

• If OpenAI does go public with a ~$1 trillion valuation, this would be among the largest IPOs in history.

• It signals how serious the company is about scaling massively (in compute, infrastructure, model development, enterprise adoption) and potentially needing huge capital injections. For example, CEO Sam Altman recently talked about building ~30 gigawatts of compute capacity. Reuters

• It offers investors a chance to “own” part of what many see as one of the most influential AI companies.

• It also may impact how competitors, regulators, and infrastructure suppliers act — since the IPO would mark a maturation of the generative-AI business.

⚠️ What to watch & caveats

• These are early stage discussions. The timing, valuation, amount raised, and structure are all subject to change depending on market conditions, company performance, regulatory/regional issues. The Reuters report emphasizes that plans “could change”. Reuters+1

• A ~$1 trillion valuation is ambitious. It implies not only strong current metrics, but also very high expected growth and/or strategic value. There’s risk if growth slows or competitors erode the moat.

• IPOs in the tech/AI space carry extra layers of complexity: hardware/infrastructure capital intensity, regulatory concerns (especially around AI safety), the need to shift from private to public-company governance, etc.

• For investors, buying in pre-IPO or IPO implies evaluating many unknowns: future profitability, business model robustness, regulatory exposure, how the compute cost curve evolves, etc.

🧩 What actually happened

• The Fed cut rates by 25 bps (to 3.75–4.00%) — the first cut of the cycle — which markets had partly priced in.

• However, Powell’s tone was not dovish enough for traders expecting a clear rate-cut cycle.

• His remarks that “December is not locked in” and that the Fed remains “data-dependent” and “not on a preset path” signaled uncertainty rather than a commitment to continued easing.

📉 Why the S&P 500 fell sharply at that moment

1. Disappointment vs expectations

   • Markets expected not just a 25 bps cut, but also a strong signal of further easing.

   • Powell instead implied caution, saying inflation remains above target → investors interpreted this as “the Fed might pause again.”

2. “Bad news is bad news” tone

   • The Fed cut because the economy is weakening (labour market softening, unemployment rising).

   • That’s not “stimulus” optimism — it’s concern about slowing growth. Equities dislike that implication.

3. Algorithmic reaction

   • Once Powell’s phrasing hit the wires (news algos scrape key terms like “not on preset path” / “data-dependent”), automated trading systems likely dumped equities, pushing the S&P lower in seconds.

   • The timing — roughly 11:30 AM ET — matches when Powell’s press Q&A or prepared remarks were disseminated through Bloomberg and Reuters terminals.

4. Bond market re-pricing

   • Yields may have snapped higher after the “no preset path” comment — because that reduces expectations for future cuts.

   • Higher yields → lower equity valuations → instant sell-off.

📊 Market interpretation summary

→ Net result: short-term disappointment → sell-off.

🧠 Big picture takeaway

This is a classic “buy the rumor, sell the news” moment:

• Markets rallied into the Fed cut, pricing in a full easing cycle.

• When Powell didn’t fully commit, traders locked in profits.

• Now, focus shifts to upcoming inflation and jobs data — each release can swing markets sharply because the Fed made policy explicitly data-dependent.